All posts tagged Carl Icahn

Herbalife shares are halted minutes after the opening bell due to news pending. It’s unclear exactly what is prompting the halt at the moment.

Shares closed Monday at $38.39. The stock is up 17% this year.

The nutritional-supplements maker has been embroiled in a bitter fight among hedge-fund manager Bill Ackman — who is shorting the stock, has called the company a pyramid scheme and has said the stock should go to zero — and Daniel Loeb and Carl Icahn, who have taken big bets that Herbalife will prevail and the stock will rise.

Pershing Square’s Bill Ackman, the hedge-fund manager who has bet big against shares of the nutritional supplement maker, released a statement Tuesday night applauding a consumer group’s plea for the Federal Trade Commission to investigate Herbalife as a potential pyramid scheme.

Earlier Tuesday, the National Consumers League released a letter urging the FTC to take action because the allegations against Herbalife could impact consumers. The group said it had met separately with representatives from Herbalife, Pershing Square and the Direct Selling Association, and concluded that an investigation is the best answer to determine whether Herbalife is a legitimate business or whether it operates a pyramid scheme.

“We are pleased that the National Consumers League, the nation’s oldest and one of the most respected consumer protection organizations, has requested that the FTC launch an investigation of Herbalife,” Ackman released in a statement. “We believe that a thorough investigation of Herbalife will reveal it to be a pyramid scheme that has harmed millions of consumers in more than 80 countries around the world.”

Fed Chairman Ben Bernanke, as seen on a monitor on the floor of the NYSE.

An upbeat jobs report stoked yet another market rally, sending the Dow to its sixth straight day of gains and a fourth-straight record finish.

In the latest edition of MarketBeat Week, our Friday podcast, the crew discusses Friday’s jobs report, the Fed’s impact on the Dow’s rally to record highs and Carl Icahn taking activism to a new level.

Herbalife Ltd. said Thursday it has reached an agreement with the billionaire investor to increase the size of its board and nominate two Icahn representatives.

Shares recently rose as much as 7.5% on the news.

The nutritional-supplements maker has been embroiled in a battle with hedge-fund manager Bill Ackman over the legitimacy of its business model. Ackman has built a more than $1 billion short position in Herbalife.

Earlier this month Icahn disclosed that he had built a big position in Herbalife and said he intended to have discussions with management about strategic alternatives, such as a recapitalization or even taking the company private.

Dueling billionaire investors Carl Icahn and William Ackman, who have gone toe-to-toe in a battle over the legitimacy of Herbalife Ltd., were silent Wednesday as the nutritional-supplements maker held a conference call to discuss its better-than-expected fourth-quarter earnings.

Mr. Ackman has bet against the company’s shares, setting up a more than $1 billion short position accompanied by a high-profile campaign questioning Herbalife’s business and calling its distribution model a “pyramid scheme.” Mr. Icahn, meanwhile, has taken a 13% stake in the company and said he intends to discuss potential strategic alternatives with the company, which he insists has significant growth potential.

The battle has played out in the public eye, notably when the two men sparred last month in a televised war of words on business news network CNBC.

It sure does seem like the animal-spirits switch has been turned back on, Mouseketeers.

M&A is taking off, the Dow is sniffing around its record highs, and the hedge-fund boys are getting seriously brazen. There’s so much business out there, the Nasdaq may have to open at 4 a.m. Things are so heady, the gold bugs are being sent back into their caves.

That might overstate it a wee bit, except the hedge-fund part, and nothing illustrates just how brazen they have gotten quite like Carl Icahn’s Herbalife gambit. Icahn disclosed he now holds a 13% stake in Herbalife, the nutritional supplements company that is the target of a major short by arch-rival hedge-fund manager, Bill Ackman.

Icahn may indeed think that Herbalife has “favorable long-term opportunities for growth,” as he stated in the disclosure. He insisted in an interview on CNBC Friday that the position he’s taken in Herbalife is strictly about making money. Yet many in the market surmise that making money is only partially the reason.

Really, it's not about Bill Ackman. It's about Herbalife and its thousands of employees.

Hedge-fund billionaire Carl Icahn went back onto CNBC this afternoon to explain why he has built a 13% stake in Herbalife, which he surprisingly disclosed late Thursday. Many have surmised it is a result of his feud with Ackman, who has a $1 billion bet against the company, and who had a now-notorious on-air debate with Icahn three weeks ago on CNBC.

The billionaire investor disclosed late Thursday that he has built a 12.98% stake in the nutrition company. In a filing with the SEC, Icahn said Herbalife has a “legitimate business model, with favorable long-term opportunities for growth.”

The filing also say Icahn intends to have discussions with Herbalife managements about strategic alternatives, such as a recapitalization or even taking the company private.

Two proverbial masters of the universe attacked each other on live television, like a couple of school kids. The Icahn/Ackman smackdown lasted nearly 45 minutes uninterrupted, the kind of air time usually reserved for major breaking news. The fight was only tangentially about Herbalife. They immediately took it back to a decade-old deal.

For the market, it was a classic moment. With every big zinger from Ackman or Icahn, you could hear hoots erupting on the floor of the NYSE (the show is broadcast from the exchange), after about seven seconds – the time it took the broadcast to travel down to the floor’s sets.

Herbalife has made big moves ahead of today’s meeting. The company has hired a strategic adviser, it is working with law firm Boies, Schiller & Flexner and it has said it will speed up a previously announced $1 billion stock buyback plan.

In Thursday’s meeting, the company fought back against hedge-fund manager William Ackman’s claims that Herbalife is a pyramid scheme. Ackman has bet more than $1 billion against Herbalife, a wager that sent the stock plummeting in late December. Herbalife has vehemently denied the pyramid-scheme allegations.

The meeting began at 9 a.m. Eastern Time.

Here at MarketBeat HQ, we’ll be offering color commentary about the meeting and tracking the stock price as the day unfolds. Stay tuned.

8:34 am (EST)

Welcome Aboard

Steven Russolillo

A new chapter in the Herbalife saga will be written this morning when the company defends itself at its investor meeting, scheduled to begin at 9 am Eastern Time. We’ll be live blogging the event all morning, and you can access a webcast of the event on Herbalife’s webcast.

Tilson, who co-manages three hedge funds and two mutual funds at T2 Partners LLC, says he thinks Icahn made a move mainly because Netflix could be a takeover target. The problem for Tilson, though, is he doesn’t want Netflix to get taken over at a low-ball price.

“I have mixed feelings about Icahn’s stake,” Tilson says in an email to clients. “While I’m not complaining about the pop in the stock, I own it because I think it has multi-bagger upside potential, so I will be very disappointed if the company gets taken out at, say, $100/share.

“It would have to be a much higher price for me to be happy about giving up this stock,” Tilson adds. “If it doesn’t get acquired, there’s a risk that Icahn come be a real distraction to the board and management.”

Netflix shares are surging amid word that Carl Ichan has taken a 10% stake in the Internet video company.

Shares recently traded up 21% to $83.99. The stock was trading slightly higher throughout most of the day before surging minutes before 3:00. Shares tripped two circuit breakers as it moved sharply higher.

Circuit breakers are intended to limit violent swings in individual stocks and are typically invoked when a stock moves about 10% within a matter of minutes.

According to an SEC filing, Icahn Amassed a 10% stake Netflix, much of it in the past week, including underlying call options. The SEC filing in which the investment is disclosed doesn’t have a specific rationale for why Icahn–who typically augurs for change in companies that he buys stock in–is now in Netflix.

Chesapeake Energy shares are up nearly 6% today, after the company announced a big shake-up of its board, in what is a victory for investor Carl Icahn and Southeastern Management, the other big shareholder.

But whether the shake-up will be enough to turn the company’s fortunes around is another issue.

The company has plans to sell about $7 billion worth of assets, and investors will want to see that plan executed, as well as the plan for next year, Ryan Dezember told us when he stopped off at the Markets Hub to break down the story.

One of the few stocks rising today is Chesapeake Energy, with investors drawn in by word that Carl Icahn has taken a stake in the beleaguered natural-gas company.

This is Icahn’s second go-round with Chesapeake. He bought and later sold a stake in 2010. That time was different in two ways: one, Icahn didn’t go activist on the company, and, two Chesapeake wasn’t under the kind of duress it’s under today (not that 2010 were salad days, either.)

One reason why Chesapeake had been tanking was because investors were concerned the board was too lenient in the running of the company. Icahn, who had taken a 5.8% stake in Chesapeake in 2010 before selling off, may want to implement a strict asset sale schedule and other rigorous measures if he buys back in.

“Last time around, Icahn was passive,” Morningstar analyst Mark Hanson tells Dow Jones. “This time, if he is taking a position, he may not be.”

About MarketBeat

MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what’s happening in the markets. Lead writers Paul Vigna and Steven Russolillo spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to paul.vigna@wsj.com or steven.russolillo@wsj.com.

Technology companies whose earnings disappoint investors are paying an unusually large toll this quarter, highlighting Wall Street’s high expectations for the sector at a time of uneven economic growth.